Tuesday, January 17, 2006

2005 pans out gold for local economy

The Fairfield-Cordelia Library on Business Center Drive is anticipated to open in December. The construction labor market was one of the hot employment sectors in 2005. (Photo by Christine Baker)

FAIRFIELD - Fairfield, Solano County and the nation moved through a year strife with political turmoil and natural disasters. Hurricane Katrina ravaged the coast, rocked the boat, and sent gas prices soaring. Locally, a much less devastating, but still troublesome flood, ruined the year for some business owners.

But despite it all, the economy moved steadily forward and the housing market surged.

Perhaps nothing was more significant in Solano County than the booming housing market. Real estate prices continued to scorch the sky - as they did the ego of anyone who passed on purchasing a house a few years ago.

The median price of homes in Solano County jumped to $490,000 in November 2005 compared with $400,000 in November 2004, according to La Jolla-based DataQuick. That was a tremendous increase of 22.5 percent in a year.

The total value of real estate sold in Solano County in the first 11 months of 2005 increased more than 16 percent from the previous year for a whopping total of $2.95 billion.

In Fairfield, housing construction slowed slightly last year when compared to 2004, but still maintained a brisk pace. More than 800 new residential units were constructed in 2005, totaling about $137 million in construction.

"It was another very successful year," said Frank Bemis, executive officer with Northern Solano County Association of Realtors.

However as 2005 was ending an apparent sea change in the real estate market began. The seller's paradise, with its frequent bidding wars for properties, has begun transitioning into a buyer's market.

The reason for the change is likely a simple matter of supply and demand.

The number of houses listed for sale climbed significantly in 2005, increasing more than 14 percent, while at the same time sales declined slightly - likely pushed down by rising mortgage rates.

In fact, the Mortgage Bankers Association predicts national gains in housing prices will slow and stagnate in early- to mid-2006 and by the end of next year housing prices will actually decrease.

Locally, unemployment fell more than 1 percent in Solano County for 2005, down to 5.1 percent.

"The economy and job opportunities have been hot," said Robert Bloom, president of the Solano Workforce Investment Board, which in part helps the unemployed find work. "We are seeing fewer people coming and seeking our services."

When the unemployment rate gets that low, it becomes a burden on employers, who struggle to find qualified workers, Bloom said.

"None of us can complain about that situation," he said.

The construction labor market was one of the hot employment sectors in 2005, according to Bloom.

But the hottest employment opportunities were in the medical and healthcare sector, he said.

One notable business failure in 2005 was the closure of Vacaville-based Large Scale Biology Corp., which closed in December.

Some 78 employees lost their jobs and Vacaville lost its original biotech company.

Nationally, the Down Jones Industrial Average and the NASDAQ Stock Market were flat, much to the dismay of investors.

But with the economy growing, wages and housing prices rising and unemployment falling, 2005 was a good year for Solano County.